Indonesia’s peatlands are frequently burned and are vulnerable to the pressures of climate change. One of the causes is due to non eco-friendly business practices on peatlands. Today, the community, government, scientists and conservationists work hand-in-hand to develop a sustainable plan for peatlands.

Because of that, International Trade Analysis and Policy Studies (ITAPS) of IPB University collaborates with the Center for Social, Economic, Policy and Climate Change Research and Development (P3SEKPI) of the Research, Development and Innovation Agency of the Ministry of Environment and Forestry, is trying to formulate a food security business model that supports sustainable ecosystem of peatlands management in Central Kalimantan Province.

ITAPS of IPB University research team consists of Dr Widyastutik, Dr Sahara, Dr Suria Tarigan, Dr Novindra, Farida Ratna Dewi, MM, Irza Ridwan, Msi, Dewi Setyawati, MSi and Siti Riska UH, SE. The research focuses on Pulang Pisau Regency to be precise in five villages, namely Buntoi, Mentaren I, Garung, Pilang, and Gohong.

“Assessment of the benefits of peatlands should not only be seen from the production function or economic function, but also from its ecological function. On peatlands, it is not permissible to simply maximize production without considering the impact on other environmental services such as carbon storage and rich biodiversity (Kehati),” said Dr Novindra, a researcher at ITAPS of IPB University.

Together with Dr Suria Tarigan, she then examined the economic valuation of peatland damage based on the four commodities it uses, i.e the use of peatlands with forest/paludicultural crops, agroforestry/rubber, oil palm and food crops and horticulture.

Their research results showed that plantation and community agriculture on peatlands (e.g. horticultural crops and rice) require drainage of peatlands. This drainage action will result in carbon emissions from peatlands. The largest emission occurs due to the use of peat land with oil palm, followed by the use of peatland for horticulture and rice, then agroforestry/rubber.

“Financially, oil palm plantations provide the greatest benefit, but because oil palm plantations require drainage if planted on peatlands, the environmental costs due to emissions that occur will result in high social carbon costs,” she explained.

The high social cost of carbon, continued Dr Novindra, means that in the short- to long-term, oil palm plantations on peatlands cause economic losses (or decrease in economic benefits). Likewise with the rubber plantation / agroforestry business which causes economic losses but is the lowest compared to oil palm plantations and rice and horticultural farming.

In contrast to the agricultural business with the paludiculture method, it provides the lowest added value financially, but in the short to long term it provides the greatest economic benefit because it does not produce carbon emissions (or absorb carbon) and reduce the social costs of carbon.

Dr Novindra, a lecturer of IPB University from the Division of Agricultural Economics, Department of Resource and Environmental Economics, continued, if the financial benefits of using peatlands and the costs of damage from using peatlands are combined (an estimate of the economic benefits of using peatlands), in the short- to long- term paludiculture business provide the greatest economic benefits compared to agroforestry, rice and horticulture.

“Therefore, the government needs to continue to facilitate communities on peatlands, in carrying out agricultural businesses that provide the greatest economic benefits in the short to long term. Namely agricultural businesses using the paludiculture method, such as rattan, jelutong, kelakai and purun plants, ” she concluded. (IAAS/ISL)